Middle Class Has Biggest Loan Debt
Middle class families living in the UK today have the worst levels of debt on the outstanding balances of their personal loans and credit cards, according to a recent survey.
According to the report which has been conducted by the credit reference agency Experian, the middle class households in Britain are the worst offenders when it comes to applying for loans and running up credit card balances and on average they owe around £50,000 each.
The research was carried out by Experian across a range of 286 post code areas in the country and found that the supposedly better off areas had the highest levels of personal loan debt, with people in wealthy areas such as London and the South East borrowing, on average more than four times the amount of those individuals living in the North West and Scotland, for example.
More alarmingly is the news that over the course of the past twelve months, since the start of the credit crunch, the average amount of middle class debt has risen by around £2,000 per person, suggesting that many individuals are using personal loans and credit cards for day to day living expenses.
One possible reason why it is this sector of the community who are the worst offenders when it comes to debt is that these are the people who have always had well paid jobs and have lived in nice houses in pleasant areas, seeing the level of equity within their property increase greatly above the balance of their mortgage over the past few years and thinking nothing of buying something on credit, because they can afford the repayments.
But now that many middle class jobs are being affected by the economic slow down and house prices are generally falling, many of these people could well be facing a tough time in the very near future.
One spokesman said “Over the past 15 years middle England has had it good, but now they are feeling the squeeze. During the good times they have got used to borrowing money and having easy access to credit based on the mentality they should take on a lot of borrowing because their house prices will keep growing. It is these groups that are really going to have to tighten their belts as they find commissions and overtime getting cut. Worryingly, I’m afraid it’s going to get a lot worse before it gets better.”
